Bitcoin prices and other cryptos fall with stocks

by James · April 20, 2023

Bitcoin

and other cryptocurrencies fell further away from key levels on Thursday, paring gains from a recent rally to fall in line with the stock market as risk sentiment took a hit amid concerns over the global economy.

The price of Bitcoin has fallen 1.5% in the past 24 hours to $28,800, pulling away from the psychologically important $30,000 level that the biggest digital asset passed last week for the first time in 10 months. The zone around $30,000 is seen as critical because that’s where prices stood last June, when crypto sales accelerated into a brutal bear market. Bitcoin has risen as high as around $31,000, but has since struggled to consolidate gains or push higher.

“There are some clear signs of exhaustion with the growth of the global crypto market cap, and if we are looking at a period of consolidation, this seemed like a good time to get out,” said Edward Moya, analyst at broker Oanda. “If downward pressure continues, support will not emerge until the $28,550 region.”

Cryptos fell along with stocks, with

Dow Jones Industrial Average

and

S&P 500

headed for a loss. Investors were concerned about inflation and how higher interest rates from the Federal Reserve and other central banks – which dampen demand for risk-sensitive assets such as Bitcoin and stocks – will weigh on economic growth.

Bitcoin remains tied to stocks amid a macroeconomic backdrop dominated by inflation, interest rates and recession risks. A high-growth play, like many tech stocks, Bitcoin also lost along with the tech-heavy Nasdaq 100, which was dragged down by the response to earnings from Tesla (ticker: TSLA).

There could also be some profit-taking at play, with Bitcoin still up around 75% so far this year despite recent declines. Market observers took notice that the latest leg down may have been triggered by a massive sell order on the Binance exchange, where one trader quickly sold 16,000 Bitcoins worth more than $460 million.

Advertisement – Scroll to continue

Regardless, as Bitcoin prices diverge further from the key $30,000 level, analysts are looking at technical market factors for clues as to where support might be.

“If it manages to hold above $28,000, it would be a very bullish market sentiment statement. A full correction … would return the price to the 50-day moving average of $26,700,” said Alex Kuptsikevich, analyst at broker FxPro. “Market dynamics in this area are worth watching, as further declines will cast doubt on the resumption of a sustained bull market in cryptocurrencies.”

Beyond Bitcoin,

Ether

—the second-largest crypto, which has outperformed following the successful completion of a critical network upgrade — shed 1% to $1,950, leaving the key $2,000 level it breached last week for the first time since May 2022. Smaller cryptos were also weaker, with

Cardano

just below flat and

Polygon

2% lower. Memecoin was more optimistic, too

Dogecoin

jumps 5% mens

Shiba Inu

rose 1%.

Advertisement – Scroll to continue

Write to Jack Denton at [email protected]